Article at a Glance — Humanities Koreans tend to think about culture only through the lenses of 'foreign/Korean' or 'Western/Eastern'. But depending on the angle, the world's cultures can be divided in many ways. Japan is an East Asian country like us, but in the 19th century, when empires were competing to colonize, Japan invaded neighbors such as Korea rather than being subjugated by a European power—so in some respects Japan has more in common with Britain or France than with us. Yet from another angle, countries with long histories, such as Korea or France, can have deeper connections with each other than with newly-settled places like the United States, and there are clearly stronger cultural affinities between them, too. So digging into the flip side of the 'extreme individualism' and egalitarianism of the New World people, and the 'cultural conservatism' and 'class consciousness' of the Old World people according to this continent-based division, is essential work for tackling each continent's market. |
Editor's Note To win the favor of local consumers and generate profit in a global market with wildly varying races, cultures, religions, sensibilities, and tastes, humanities-level insight is required. Far more often than expected, a product with a design Korean customers think is most beautiful can be repulsive, or taken in a totally different sense, by customers in another country. Cho Seung-yeon, a language expert intimately familiar with Anglo-American and Southeast Asian cultures and a 'cultural strategist,' serializes 'Cultural DNA and Global Strategy.' Starbucks, which first opened in Seattle, USA in 1971, is no exaggeration the most successful coffee chain in the world. It has about 12,000 stores in the US and roughly 20,000 worldwide, and is still showing explosive growth. In the third quarter of 2013, Starbucks management recorded a 25% revenue growth rate, making the forecasts of experts that the coffee business was saturated look pale.1) Buoyed by domestic success, Starbucks sought entry into the 'Old World' from 2004. Over eight years, from 2004 to 2012, it entered France and opened 63 stores. But never once did it turn a profit.2) In France too, young fans of American TV dramas, foreigners who cannot adapt to local food, and freelancers coming to the store with laptops to use the free Wi-Fi did visit Starbucks, but in the mainstream French coffee market the chain failed to establish much presence. The disappointing result was similar not just in France but also in the hearts of the Old World—Amsterdam in the Netherlands, Vienna in Austria, and so on. American newspapers have published various analyses of Starbucks' failure in France. Summarized, they run as follows. First, 60% of French people drink straight espresso, but Starbucks coffee is a base designed to be mixed with various creams and syrups, so drinking it straight feels far too bitter. Second, French people have long treated the café as a place to sit facing friends for a long time and chat freely, so Starbucks' core 'takeout' business inevitably struggles. Third, the cost of the interior fittings needed to match French people's exacting taste is too high. On top of that, high European labor and rent costs create a structure hard to profit from. The French also have a long-standing tradition of not eating while walking. It is a very old culture. For that reason, some have argued, the 'trendy people' image of walking around with Starbucks' iconic 'big cup' and drinking coffee on the street does not help sales. Pulling these analyses together: French people have enjoyed coffee for so long that strong fixed notions of 'coffee is this' and 'a café is this kind of place' make it hard for innovative operations like Starbucks to take root. This is not only Starbucks' problem. Whenever companies from countries with short histories—the US, Canada, Australia—try to transplant business models that succeeded through innovation in their home markets to Old World countries with long histories, they struggle. There are many examples of New World businesses, which prize convenience and practicality, failing because they did not grasp the deeply rooted fixed notions and traditions of countries with long histories. For innovative American companies, France is the hardest Old World market to adapt to. Pride in its own way of life is extremely strong. In 1997, after entering France the US burger chain Burger King saw such weak revenue that it closed 39 of its most loss-making stores. 'Disneyland Paris,' failing to understand the employment culture and educational environment of the French, suffered through waves of fierce French protests from the 1990s and even earned the nickname 'cultural Chernobyl.' Disney made various efforts, including lifting the ban on alcohol in in-park restaurants to match the French habit of not eating without wine, but reports came out that on the 20th anniversary of Disneyland Paris opening in 2012, the park had not made a profit and had accumulated $1.9 billion (about 2.3 trillion won) in debt.3) Countries born of New World settlement such as the US, Canada, and Australia have very different historical experiences from the 'Old World,' which has sustained itself for thousands of years. Those experiences have accumulated as humanities materials like literature, art, and cinema, and have created what you might call an acquired inheritance—a difference in cultural DNA between the New World and the Old World—transmitted to later generations. Some executives who must run global-scale businesses, while having to absorb cultural differences, overlook the cultural DNA gap between Old and New Worlds and frequently come into conflict with consumers, employers, and employees. Of course, as in the cases above, this can cause serious losses. 
New World Extreme individualism The term 'New World' was coined by 'Amerigo Vespucci,' the man from whose name the continent 'America' also derives. The first European to set foot on the American continent was Columbus, but he believed the place he had visited was India. Amerigo Vespucci put together his Brazil voyage and the accounts of Portuguese sailors and, realizing that there was an enormous new continent to the west of Europe, wrote to the Medicis, then Europe's greatest patrons, that there was a 'Novus Mundus'—a 'new world.' That phrase still lingers in European language habits; Europeans distinguish the Eurasian continent as the 'Old World,' and the Americas, South America, Australia, and so on as the 'New World.' Europeans who left their homelands first for the New World generally had to cultivate the land and build villages by their own efforts, far from any reach of government protection. The land was vast and labor was nowhere near enough, so everything had to be self-sufficient. They had to do farming, raise livestock, make their own tools, build their own houses. There was no army or police protection, so if natives or strangers from the next village broke into the house, they had to take up guns themselves and defend themselves and their families. For that reason, the basic unit of human being engraved in the cultural DNA of New World people is thoroughly 'the individual.' To summarize: in a New World of extreme low population density and unshielded exposure to natural disasters in the pioneer era, academic background, age, lineage—none of them could protect you from threats to your life. One had to safeguard one's own and one's family's life and property by one's own effort and strength alone. That is how fierce individualism developed in the New World. Research by Dutch business school professors Charles Hampden-Turner and Alfons Trompenaars shows this clearly. Surveying workers from various countries on what makes a 'good work environment,' the two professors found a very large gap between the thinking and culture of Old World and New World people. For example, they called a company that rewards and penalizes based on individual performance 'A,' and a company that, as a community of employees, shares work and profits 'B.' When asked 'which company would you rather work at,' 90% of people from New World countries (US, Canada, Australia) chose A. That means New World people strongly believe individuals must take responsibility for their own work. It also means they carry a culture averse to sharing a common fate with others. For Old World countries such as Germany, Italy, Belgium, and France, about 70% chose A, and in Asian countries like Japan and Singapore, only 50% chose A. Let us sum up the findings again. People in East Asian cultures, including Koreans, believe they themselves are strongly 'collectivist.' Westerners, on the other hand, are all assumed to think strongly along individualist lines. But look at this study: the gap between Asians (50%) and Europeans (70%) on choosing 'company A, the individualist one' is 20 percentage points—the same as the gap between Europeans (Old World people) and New World people (90%). In other words, the difference in mentality between New and Old World people is as large as the difference between East Asians and Old World Europeans. There is another interesting result. In response to the question 'Is it justified to fire a person who has loyally worked for a company for 15 years, if they make a mistake that causes a loss to the company?' 75% of people in the US and Canada said yes, the person should be fired. By contrast, only about 30% of people in France, Germany, and Italy said yes, and only 25% of people in Korea and Singapore said yes. In a frontier where population was absurdly small relative to the size of the land and every person had to handle their own affairs, a single person in a group action who failed to do their role and slowed the group's movement or only consumed food could put everyone's life at risk. That is why New World people are so cruelly cold toward someone who fails to fulfil their responsibility. A company that does not understand the extreme individualism of New World people can face great management difficulties when expanding there. In 2014, the US workplace review site 'Glassdoor' published workplace satisfaction scores for Korean companies operating in the US, and it drew attention on SNS. In that survey, Twitter, Bain & Company, and Google received the highest scores at 4.5 or above, while the average for the US top-100 companies was about 3.6. However, Samsung's US operation, at 2.7, scored below average in employee satisfaction, drawing attention. New World people want an environment where they can work autonomously according to their own ideas and tendencies, and they want accurate measurement of individual performance with matching rewards and penalties, so we can see they have considerable dissatisfaction with the Old World-style Korean corporate culture of 'work together, share together.' 1) <Bloomberg> July 26, 2013. 2) <The New York Times> March 30, 2012. 3) <Daily Mail> April 12, 2012. |
